It's a world of Card nowadays. Hardly people carry cash with them, majority of the times only cards are used. Personally, even I prefer to use cards, and keep less cash with me. Because the more cash I have the more unnecessary expenditure I make. But in India still not everywhere cards are used, many small-time businesses run on cash. So, cash is required to be kept handy.

Between the Debit Card and Credit card personally my choice is to use more of Credit card. There are pros and cons of having a Credit card. One major drawback is sometimes you end up spending money more than what you have and this creates pressure later on paying up. If you use only Debit card, then you know what you have and how much you need to spend.

The reason why I use a credit card is because I get a credit period time to make the payment and during this time period, I can earn some additional interest on the money that is in my savings account. The other benefit is the reward points on the credit card use. Later these reward points redeem for shopping vouchers. So, it's like a gift that I get on the spending that I do.

One thing I am very cautious about while using my credit card is, to never over utilize it. Means, I never use my credit card for an amount more than what I can afford to spend. Every month I make my expense sheet in advance and then budget it against the income I have. From that then I decide which payments can be done by credit card and later I can pay that money. My system is just like using a debit card but the payment happens at a little later stage and not immediate. This way I can get some benefits from the reward points and a little interest from the savings account. Though the second one is very negligible.

Since the last 3 years I was accumulating my reward points on my credit card and last year on my Son's birthday I gifted him a Mac Pro where almost 70% of the cost I paid from my reward points. That's a very good deal, right. From all the spending that I did in the 3 years I could manage to pay 70% of the laptop cost. It is a additional benefit for me. Within our family we have one credit card and we all use the same one for all the expenses with the same concept. So that all points get credited on one card and can be redeemed when needed.

The Golden rule is never overspent than what we have. That way we do not end up in any trouble of payment, and never default a payment and get any additional fees charged. Because if the payment gets defaulted then the cost of late payment is very high. If one does not have control over finances, then it's best not to use the Credit card and only keep up with Debit card. Otherwise using the Credit card can be beneficial in some ways.

What do you prefer. Using your Debit or Credit Card?

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